Instead, I will add Ladder to my Motley Fool CAPs account to keep a closer eye on what I think could be a very enticing high-yield investment in the near future. Since I would like to see Ladder Capital prove it can manage the rigors of being a REIT, I am not buying today. This means REITs must be extra disciplined with how they manage their funding and investments. The sector is vast and ever-changing with plenty of exciting opportunities. While this makes them a fantastic income investment, these companies do not have the luxury of retained earnings. Tech stocks represent partial ownership in companies that produce, distribute, manufacture, and research new technology. Watching and waiting As mentioned earlier, REITs pay out 90% of their taxable income to shareholders. I don't know about you, but that just feels right. That means if management is getting rewarded, so are shareholders. Ladder Capital and other internally managed companies are paid based on performance. Our Manager's entitlement to a base management fee, which is not based upon performance metrics or goals, might reduce its incentive to devote its time and effort to seeking investments that provide attractive risk-adjusted returns for our portfolio.
We pay our Manager substantial base management fees regardless of the performance of our portfolio. Once a loan is made, Ladder Capital can sell it and earn a fee, or hold the loan on its balance sheet and collect interest. The company's primary business is making commercial real estate loans, and those assets are diversified among loans to property owners primarily for hotels, office, retail, or multifamily properties. Diverse income stream A versatile business can make money in a number of ways, and Ladder Capital is no exception. All things being equal, the lower tax rate should boost earnings per share.īeyond tax breaks and yield, however, I think there are three big reasons investors should be paying close attention to this REIT newcomer.ģ. Second, in exchange for paying out nearly all of their income to shareholders, REITs receive significant tax breaks. In fact, compared to similar companies – like Starwood Property Trust and Blackstone Mortgage Trust – it's possible we could see a yield in the 4% to 6% range. That means Ladder Capital will go from paying no dividend to a hefty dividend almost overnight. The company's new look should come with two immediate benefits for shareholders.įirst, REITs are required by law to payout 90% of their taxable income.
All rights reserved.In the immortal words of How I Met Your Mother's Barney Stinson, "New is always better." And in this case, I think he's right, because on December 15, 2014, special finance company, Ladder Capital ( LADR -0.34% ), became one of the most recent companies to announce its intention to become a real estate investment trust, retroactive to Jan. It's always interesting to watch the antics of cash-strapped biotech stocks.Read OnĮquipment Manufacturers Seek to Capitalize in the Fast-Ĭompanies like Applied Materials (Nasdaq: AMAT), KLA-Tencor (Nasdaq: KLAC), Photon Dynamics (Nasdaq:PHTN). In a tough economy, the tough get going by stocking up on beerĪre consumers drinking away the blues. Higher debt means more biggest cryptocurrency exchanges confident consumers? When reliable information isscarce, fraudsters can easily spread false. manufactures invest in Stellar Ultra-Clean stationary fuel cell power plants that generate electricity with up to twice the efficiency of conventional fossil fuel plants. Information about 'microcap stocks' low priced stocks issued bythe smallest companies may be difficult to find. Read Moreīeacon Power is a global leader in the development and commercialization of flywheel-based energy storage solutions.Read MoreįuelCell Energy, Inc. is a vertically integrated solar energy solution provider.
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